FirstNet subscribers also boosting AT&T service revenues
As it expands the reach of its gigabit LTE (5G Evolution) offering and turns up standards-based 5G beginning later this year, AT&T will simultaneously create new revenue opportunities while beginning to reap the benefits of its long-term investment in network functions virtualization, according to SVP and CFO John Stephens.
Stephens, speaking at the Oppenheimer 21st Annual Technology, Internet and Communications Conference, highlighted the carrier’s network upgrade program, which includes expansion of the 5G Evolution service, deployment of the nationwide FirstNet network, and activation of 700 MHz, WCS and AWS spectrum.
With FirstNet, AT&T is activating the 700 MHz spectrum, while also putting into service previously untapped spectrum holdings. “It will be a dramatic increase in capacity,” Stephens said, also noting the significant capital costs associated with the build. “This will be very efficient overall but at the current time it requires more capital.” But, as 5G standards continue to be finalized, “In most cases it will be a software upgrade. IT won’t be a tower climb,” which “will give us some flexibility or ability to lower capital intensity as we move into that 5G technology span. That efficiency is very important and that’s part of the network functions virtualization story.”
AT&T is working toward having 75% of its network virtualized by year-end. “We continue to invest to get that increasing percentage, but once you get there those investments that you’re making to achieve that goal ebb out. Then you’ve got the full benefit. That’s on major aspect of automation and streamlining.”
On Time Warner, which AT&T has renamed Warner Media, Stephens noted that the Turner networks, for instance, show strong demand on both traditional linear consumption as well as viewing on over the top platforms like Netflix or Hulu. He said AT&T has something like 160 million wireless, video, broadband and DirecTV customers and “Time Warner brings more than that…from their digital properties. That’s a great opportunity.”
